Consumer borrowing jumped in July to the fastest pace since 2017, a signal that consumers spending and confidence remain strong and will likely continue to support an expanding economy.
Oustanding consumer credit, which excludes mortgages, rose at a 6.8 percent seasonally adjusted annual rate, according to a report released Monday by the Federal Reserve.
Revolving credit, which is primarily credit card debt, rose at an 11.2 percent annual rate in July after contracting in June.
The sharp rise in July borrowing can be chalked up to Americans’ very high consumer confidence. Even as trade tensions have roiled financial markets and the global economy has slowed, consumer spending and measures of consumer sentiment in the U.S. have remained strong. Indeed, robust consumer spending has cushioned the impact of a slowdown in the U.S. manufacturing sector.
Nonrevolving credit, which includes auto loans and college loans, increased at a 5.3 percent annual pace.
The total amount rose by $23.3 billion in July. Economists surveyed by Econoday expected a $16.1 billion.